Layoffs, funding delays reported at Solera Auto Finance

Solera announced Solera Auto Finance at the NADA Show in March 2022 and expected to reach 20 states by the end of the year. By August, it had reached 39 states and was working with more than 2,000 dealerships.

Solera Auto Finance had been aggressive in seeking business, the second Solera Auto Finance sales manager said. The company had reached a rate of $25 million a month in loans, “and that’s when they hit the brakes on everything,” he said.

“Solera Auto Finance’s entry into the automotive lending space was a success and well received by dealers,” Casas said in the statement. However, she said the current credit environment and consumer outlook “necessitates us to take a more prudent approach for the time being.”

The first manager estimated Solera Auto Finance began to fall behind in funding deals in the fall.

A general manager at a southern US independent dealership, who asked not to be identified given his Solera business relationship, described how the first loan he sent to Solera Auto Finance flopped around that time.

He said Solera had agreed in October to buy a loan for a BMW 4 Series. The deal was “100 percent good to go” and contracted, he said — but then Solera Auto Finance shortly thereafter declared it wouldn’t fund the deal.

“Any deal that has been returned is in accordance with the applicable dealer agreement between Solera Auto Finance and the individual dealer,” Casas said.

The first Solera Auto Finance sales manager said the company sent dealers their funding for October’s deals in November. It planned to cover the November loans in December, but “they never got around to that,” he said. (One dealer client who “complained enough” was reimbursed for his November business, but that was the exception, the manager said.)

“Solera Auto Finance continues to fund deals,” Casas wrote in response to allegations of fall funding delays.

The second sales manager said representatives were barred from asking internally when their auto retailers would accept the money owed them.

“Sales representatives always have direct contact with and access to Underwriters and Funding staff,” Casas responded.

Despite its funding delays, Solera Auto Finance still wanted to collect more loans from dealerships and their customers, according to the second sales manager. “We were still instructed to push for contracts,” he said.

Casas said the lender “adapted its underwriting standards to the current macroeconomic conditions and the business will continue to evolve as changes occur in the automotive lending space.”

The company representatives instructed representatives to tell dealers funding would come, the second manager said. However, it would wait 30 to 60 days before making the dealer whole, he said.

“It’s gross mismanagement,” he said.

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